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AAP

2013-02-05

Australia's employment market is expected to have started 2013 on a weak note, with not enough jobs created to offset population growth.

AAP's survey of 15 economists showed a median expectation for the unemployment rate to rise 0.1 per cent to 5.5 per cent in January.

Total employment is expected to grow by 5,000 in the month, not enough to offset population growth.

Meanwhile, the participation rate - the percentage of people over 15 either in employment or looking for work - is expected to remain flat at 65.1 per cent.

AMP chief economist Dr Shane Oliver said the economy needed to add about 15,000-20,000 jobs a month in order for the unemployment rate to remain steady, but that kind of growth was unlikely at present.

"The labour market is going through a softer patch. We've seen month after month a fall in job vacancies, and business hiring plans remain weak," he said.

"I think we are still going through that phase in the economy where the weakness we saw late last year is leading to higher unemployment and that may have a little bit further to go before it has run its course."

St George economist Janu Chan said the jobs market was likely to remain weak for several months, with the unemployment rate rising towards 6.0 per cent.

She said economic conditions remained subdued with many sectors struggling due to the high value of the Australian dollar.

"Overall, the view of the labour market that we have is that it will be soft but still continuing to post modest job growth," she said.

"Maybe not enough (jobs growth) to prevent the unemployment rate from rising, but we don't expect the unemployment rate to rise significantly," she said.

However, CMC chief market strategist Michael McCarthy said he believed the unemployment rate had peaked and the jobs market would continue to improve, albeit modestly, over the next 12 months.

"I think we're heading back towards an unemployment rate of five per cent over the course of the year," he said.